Friday, March 29, 2013

Stevedoring and terminal operations company SSA Marine has
been chosen by the Port of Stockton to manage the terminal for a new barge
service that will operate between Stockton and the Port of Oakland.

The barge service, which is called the M-580 Marine Highway,
is so named because it would be parallel to Interstate 580, the corridor that
many truckers use to transport goods to and from the ports.

The $30 million project, which is partially funded by the US
Transportation Dept., is aimed at moving ocean shipping containers by barge
instead of trucking between the Port of Oakland and the Central Valley.

The service was initially projected to open in the fall of
2012, but was delayed by issues regarding how much union labor would be used.
The barge service is now expected to debut later this spring, according to
Stockton officials.

Under its contract with the port, SSA Marine is expected to
provide terminal services, including terminal management, marketing and
logistical support for the Marine Highway, while port officials provide
management oversight for the project.

SSA already operates a terminal in Oakland, something port
Director Richard Aschieris has said is an added advantage for the company.

It’s estimated that about 1,600 containers per day move
between the Stockton and Oakland ports along I-580, which is one of
California’s most congested freeways. Stockton says the barge service could
potentially save shippers time as well as money in transport costs, since it
would allow containers to be loaded in excess of California’s highway weight
limit of 22 metric tons.

An $84 million Port of Long Beach project to remove a railroad bottleneck and build additional on-dock rail capacity to move cargo more efficiently and sustainably was officially launched March 26.
The “Green Port Gateway” project, funded in part with state and federal transportation money, is realigning a rail pathway to the port’s southeastern terminals and adding a rail support yard for Long Beach’s new Middle Harbor mega terminal, which is currently under construction.

The project adds a third rail line at Ocean Boulevard, helping to remove bottlenecks on the existing mainline track to allow port terminals to shift cargo from trucks to trains, which decreases local traffic congestion and air pollution. Roadwork will also be needed to reconfigure a port thoroughfare to make room for the additional rail line. Overall, the port says, about 29,000 feet of track is being added.

The port’s funding the project with the help of $27 million from the State of California’s Proposition 1B Trade Corridor Improvement Fund and $17 million from the US Department of Transportation’s TIGER (Transportation Investment Generating Economic Recovery) III program.

The Green Port Gateway is the first of four rail projects already started or expected to begin in the next year to promote more on-dock rail shipments. It’s also part of the larger San Pedro Bay Ports Rail Enhancement Program, which involves several projects by the ports of Long Beach and Los Angeles as well as the Alameda Corridor Transportation Authority.

The project, which is expected to generate about 340 jobs now through scheduled completion of the work in July 2014, is part of about $4.5 billion in capital improvements in progress or planned this decade at Long Beach.

The ports of Long Beach and Los Angeles should see steady
growth of containerized cargo imports and exports during 2013 as the U.S.
economic picture improves, a panel of industry experts predicts.

During the annual “Pulse of the Ports Peak Season Forecast”
on March 27 in Long Beach, representatives for the retail, shipping and
terminal operating sectors as well as an economist, predicted three to six
percent growth in freight volume during the upcoming cargo peak season, from
August through October.

The San Pedro Bay ports themselves predict a 3.4 percent
nationwide increase in imports in 2013. The outlook compares favorably to
recent years when experts were still waiting to see some concrete signs of
economic recovery at home and worldwide.

“All the wheels are turning in the right direction,”
panelist Walter Kemmsies, the chief economist for the Moffat & Nichol
transportation infrastructure engineering firm, said. “We expect the economy to
be better this year than last year.”

The positive outlook was tempered, however, by concerns over
the looming reduction in staffing by US Customs and Border Protection at
seaports due to the federal government’s mandatory “sequestration” budget cuts.
Customs has cut worker overtime due to sequestration and could eventually
furlough employees. This, Pacific Merchant Shipping Association President John
McLaurin said, hurts the San Pedro Bay ports, since they rely heavily on
Customs personnel working overtime for inspection services.

The panel also expressed concern over economic impacts of
state-by-state environmental regulations and hurdles that hamper the
productivity of drayage trucking operations at local ports.

The ninth annual Peak Season Forecast, which was held in
downtown Long Beach, drew a capacity audience of nearly 600 people and featured
nine panelists from every segment of the industry.

In addition to Kemmsies and McLaurin, the other panelists
were Jonathan Gold, the National Retail Federation’s Vice President of Supply
Chain & Customs Policy; Erika Montoya, Program Director for the Specialty
Crop Trade Council; International Longshore and Warehouse Union Local 63
President Michael Podue; Chad Lindsay, Vice President of the Pacific Maritime
Association; Knud Stubkjær, CEO and Chief Strategic Officer for SSA Marine;
Steve Bobb, Executive Vice President & Chief Marketing Officer for BNSF
Railway; and Vic La Rosa, CEO/President of Total Transportation Services Inc.

The archived webcast of the two-and-a-half-hour program is
available online at http://www.polb.com/pulseports.

Concentrations of elemental carbon in the Port of Los
Angeles area fell in 2012 to the lowest levels since the port began collecting
data in 2005, new data from four air quality monitoring stations in and around
the port show.

Elemental carbon is used as an indicator of diesel
particulate matter, or DPM, which is the soot produced by the combustion of
diesel fuel.

“I’m extremely pleased that we’ve been able to continue to
significantly reduce diesel particulate matter in the communities in and around
the port,” said Port of Los Angeles Executive Director Geraldine Knatz said.
“Year after year, air quality in the Los Angeles Harbor is improving as a
result of substantial investments the port, its tenants and other port-related
businesses have made by purchasing cleaner equipment and participating in a
variety of emission-reduction initiatives.”

For calendar year 2012, elemental carbon was down by 72
percent in the Wilmington waterfront area, compared to calendar year 2006, the
first full year of monitoring data collected. The San Pedro monitoring station
showed a decrease of 61 percent, monitoring data shows.

These drops in elemental carbon happened even as cargo
volumes at the port increased. In 2012, L.A. handled 1.7 percent more cargo
than in 2011, but elemental carbon at both the Wilmington monitoring and San
Pedro stations were 39 and 18 percent lower, respectively, than in 2011.

Since 2005 the port has operated four air quality
measurement stations: one in San Pedro, another in Wilmington, and two inside
the port complex. They measure air quality both in the port complex and in the
communities downwind of the port, where air quality is affected by emissions
from the ships, trucks, terminal equipment, harbor vessels and train
locomotives that move cargo through the port.

Tuesday, March 26, 2013

Everyone in the maritime industry knows what a vessel is.
Or, maybe not. Recently, the United States Supreme Court provided some guidance
on what is a vessel and what is not a vessel.

The Statutory Definition of “Vessel”

Federal statutory law defines a “vessel” to
be “every description of watercraft or other artificial contrivance used, or
capable of being used, as a means of transportation on water.” The definition
of vessel is important in various contexts. For example, the federal lighting
requirements apply only to vessels. Further, the rights of an injured maritime
worker may depend on whether the injury occurred on a vessel. Moreover, as the
recent Supreme Court case illustrates, only a vessel may be the subject of a maritime
lien.

As readers may recall from a prior article,Appeals in Maritime Cases (Pacific
Maritime Magazine,March 2012), there
is no automatic right to appeal an adverse decision by a federal appellate
court to the United States Supreme Court. However, the Supreme Court may agree
to hear a case for several reasons, one of which is an inconsistency in rulings
from different federal appellate circuits on the same point of law. The United
States Supreme Court recently agreed to consider Lozman v. The City of Riviera
Beach, Florida, 568 U.S. [TBD]* (2013) because the courts of appeals in the
Fifth and Eleventh Circuits were not consistent in their interpretations of the
term “capable” found in the statutory definition of vessel.

The Fifth Circuit interpreted the term in a
case involving a floating casino and held the structure was not a vessel when
it was only theoretically capable of sailing and the owner intended to moor it
indefinitely. The Eleventh Circuit also interpreted the term in a case
involving a floating casino. Despite the owner’s intent to moor it permanently,
the court held the structure was a vessel because it had functioning machinery
and a maritime crew, and was capable of moving over water and being transported
on water under tow.

The Underlying Facts of the Lozman Case

Lozman was the owner of a 60-foot by 12-foot
floating home. The home was built of plywood, and had French doors on three
sides. It had a sitting room, bedroom, closet, bathroom, and kitchen on the
main floor. A stairway led to an office on the second level. An empty bilge
space underneath the main floor provided buoyancy.

After buying the floating home, Lozman had it
towed 200 miles to a small village in Florida where he moored it. He had it
towed twice thereafter to nearby marinas. Several years later, Lozman had his
floating home towed seventy miles to a marina owned by the city of Riviera
Beach, Florida where he kept it docked.

After unsuccessful efforts to evict Lozman
from the marina, the city of Riviera Beach brought a federal admiralty action
in rem against the floating home, asserting a maritime lien for unpaid dockage
and trespass damages. Lozman asked the district court to dismiss the case,
arguing the court lacked admiralty jurisdiction because the floating home was not
a vessel and therefore could not be subject to a maritime lien.

The district court found the floating home to
be a vessel, and as a result, concluded it had admiralty jurisdiction over the
case. After a court trial, judgment was entered in favor of the city of Riviera
Beach for $3,039.88 for dockage and $1 for trespass damages. The district court
also ordered the floating home to be sold to satisfy the judgment. The city of
Riviera Beach bought the floating home at a public auction and then arranged for
it to be destroyed. However, before the sale, the district court ordered the
city of Riviera Beach to post a $25,000 bond to secure Lozman’s interest in the
vessel just in case it was wrong in its analysis about whether the floating
home was indeed a vessel.

Lozman appealed. The Eleventh Circuit agreed
with the district court’s determination of the floating home’s status as a
vessel. It reasoned the floating home was “capable” of movement over the water
and accordingly fell within the statutory definition of a vessel. It also
reasoned the owner’s subjective intent to keep the floating home moored
indefinitely did not affect the floating home’s character as a vessel.

The Supreme Court’s Holding

A majority of the justices on the US Supreme
Court disagreed with the district court and Eleventh Circuit and held the
floating home was not a vessel and could not be subject to a maritime lien. It
focused its analysis on the meaning of the statutory phrase “capable of being
used…as a means of transportation on water”. It declined to interpret the
phrase broadly to encompass every item that can float. It reasoned some objects
that float such as a wooden washtub, a plastic dishpan, a swimming platform on
pontoons, a door taken off its hinges, or “Pinocchio when inside the whale,”
are clearly not vessels. Rather, the court held a structure does not fall
within the scope of the statutory definition of a vessel unless “a reasonable
observer” looking at the structure’s physical characteristics and activities
“would consider it designed to a practical degree for carrying people or things
over water.”

To the court, the physical attributes and use
of a vessel were a more reliable basis for the determination of a vessel’s
status than the intent of the vessel owner. A structure’s mere capacity to
float, to move on the water, or to carry people or objects is not determinative
of its status as a vessel. Instead, the court concluded the statutory
definition of a vessel should be interpreted to mean a craft whose purpose to a
reasonable degree is the transportation of persons, cargo, or equipment from
place to place on the navigable waters and which purpose is undertaken.

To explain the rationale of its ruling, the
Supreme Court contrasted the results in two earlier Supreme Court cases in
which the court had to decide whether a particular watercraft was a vessel.
Evansville & Bowling Green Packet Co. v. Chero Cola Bottling Co. 271 U.S.
12 (1926) involved a wharfboat that floated next to a dock. The wharfboat,
which was connected to the dock with cables, utility lines, and a ramp, was
used to transfer cargo from ship to dock and from ship to ship. It was towed
away from the dock each winter to avoid river ice. Even though the wharfboat
was regularly moved, the court held it was not a vessel because it was not
actually used to carry freight from one place to another and was not exposed to
the perils of navigation that vessels used for transportation typically
encounter.

Stewart v. Dutra Construction Co. 543 U.S.
481 (2005) involved a dredge with a clamshell bucket that would remove silt
from the ocean floor and deposit it into two scows floating nearby. The court
held the dredge to be a vessel within the statutory definition because it had a
captain, crew, navigational lights, and ballast tanks. Although the dredge
could move only by manipulating its anchors and cables, the court noted it
moved over the water every few hours. The court reasoned dredges serve a
waterborne transportation function by transporting machinery, equipment and
crew over the water, and therefore are vessels.

Applying their guidelines, the Supreme Court
explained why Lozman’s floating home was not a vessel. Even though it floated,
nothing about the home’s design suggested it was intended to be used for
transportation of persons or objects over water and it was not so used. It had
no steering mechanism or rudder. Its hull was unraked and it had a rectangular
bottom. It had no capacity to generate or store electricity and had to rely on
shore power. Finally, the court noted the home’s rooms were more consistent
with land-based living accommodations, having ordinary windows and French doors
instead of watertight portholes. Although not determinative, the lack of
self-propulsion was another factor leading to the court’s determination that
the floating home was not a vessel for maritime lien purposes.

Loss of vessel status

The Supreme Court also held a vessel’s status
as such is not necessarily permanent. That is, a vessel under the criteria set
forth in the opinion, might lose its status as a vessel because of certain
physical modifications. The court cited a situation in which a vessel owner
might take a structure that is otherwise a vessel and permanently affix it to
the land for another purpose, using the Queen Mary’s conversion into a hotel in
Long Beach, California as an example.

In Lozman, the Supreme Court attempted to
clarify what is and what is not a vessel in the maritime law context. In
effect, it has substituted the phrase “designed for” in place of the statutory
phrase “capable of”. What remains to be seen is whether the desired clarity has
been achieved.

Marilyn Raia is of counsel in the San
Francisco office of Bullivant Houser Bailey. She has been certified by the
State Bar of California as a specialist in admiralty-maritime law. She can be
reached atmarilyn.raia@bullivant.com.

*The citation to the Supreme Court case does
not have an official page number yet because it is too new.

For the second time this month, the Port of Tacoma was
temporarily shut down March 25 after a longshore worker died on the job.

In the latest incident, refrigerator mechanic Dana Gorham
died about 8 am March 25 while working at the APM Terminal. According to port workers,
Gorham was working from a five-foot ladder when he fell from the ladder,
possibly after being shocked by a nearby electrical cable. According to the
Pierce County Medical Examiner’s office, the 57-year-old Gorham had an enlarged
heart and the cause of death was heart disease.

International Longshore Union Local 23, Gorham’s employer
and the state Department of Labor and Industries all say the incident will be
investigated.

Following the death, longshore workers followed a custom reserved
for on-the-job fatalities and shut down all operations for 24 hours. ILWU
members were reportedly back on the job at about 8 am March 26.

Gorham had worked for Pacific Crane Maintenance, the same
company that had employed a man who died March 12 while working at the port’s
Pierce County Terminal.

In the March 12 incident, 46-year-old crane mechanic Jeff
Surber died around noon while atop a crane he had been maintaining at Pierce
County Terminal. He was making adjustments to the wire ropes used to raise the
metal containers to and from the ship’s deck, according to the ILWU.

The medical examiner’s report said Surber died of blunt
force trauma to the head. The incident, like the March 25 death, is being
investigated by the union, Pacific Crane and the Labor Dept.

After just one day of resumed talks, contract negotiations between the Pacific Northwest Grain Handlers’ Association and the International Longshore and Warehouse Union Locals 4, 8, 19, 21 and 23 have apparently broken down – again.

The Grain Handlers Association is negotiating for three companies: United Grain, which has an export terminal at the Port of Vancouver; Columbia Grain, which operates a Port of Portland terminal; and LD Commodities, operator of facilities in Portland and Seattle.

The association also represents TEMCO, a joint venture between Cargill and CHS that has facilities in Kalama, Portland and Tacoma. TEMCO and the union, however, reached a five-year contract agreement several weeks ago, under the stipulation that the agreement is subject to whatever agreement is finally reached with the whole group and is subject to modification in order to reflect an eventual agreement between the union and other Grain Handlers Association member companies.

On March 22, during the first bargaining session between two sides in months, the union offered the TEMCO deal to the other members of the multi-employer group. The employers’ group, however, declined to discuss the TEMCO agreement during the March 22 session, leading to a breakdown in talks, according to the union.

A March 23 negotiating session was cancelled and no future dates are scheduled, union spokeswoman Jennifer Sargent said.

The Grain Handlers Association’s began negotiations with the union in September 2012, seeking a contract similar to what was worked out between management and longshore workers at the Port of Longview in early 2012 for the port’s EGT grain terminal. The contract includes several cost-saving measures.

However, the ILWU has said it won’t budge on some concessions the owners have asked for, such as 12-hour work shifts, an ability to bypass the union hiring hall and being given greater control over the ability to fire dockworkers.

Port of Seattle CEO Tay Yoshitani was named chairman-elect
of the American Association of Port Authorities during the group’s board of
directors meeting last week in Washington, DC. He assumes the role of chairman
at this fall’s AAPA convention in Orlando.

Yoshitani has been chief executive officer of the Port of
Seattle since March 2007. He’s the former chief executive of both the Maryland
Port Administration and the Port of Oakland and was also previously the deputy
executive director with the Port of Los Angeles.

Born in Japan, Yoshitani is a graduate of the US Military
Academy at West Point, a Vietnam veteran and holds a master’s in business
administration from Harvard University.

He said his nomination as chair is a reflection of the
efforts of the port as a whole.

“This appointment says volumes about the work our staff is
doing in Seattle,” Yoshitani said. “Our team has developed a reputation for
generating new ideas on environmental sustainability, strategic foresight and
financial stability of the port. I look forward to advancing the conversation
on trade promotion and other issues critical to the future of ports throughout
the Americas.”

Last fall, Yoshitani was the subject of an ethics probe by
Port of Seattle commissioners after he joined the board of a for-profit
logistics company, but an investigation found no conflict of interest or
violations of law because the logistics company doesn’t compete with, or
conduct business directly with, the port.

The AAPA, which is headquartered outside Washington, DC, is a
trade group representing about 160 ports in the Western Hemisphere. It advances
its members’ interests through public advocacy and professional development.

The job of chairman, an uncompensated position, is currently
held by Armando Duarte-Peláez, a longtime board member of Colombia’s Sociedad Portuaria
de Santa Marta.

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EDITORIAL

Pacific Maritime Magazine California Contributing Editor Karen Robes Meeks spent several years covering the ports of Los Angeles and Long Beach, California for the Long Beach Press-Telegram and our sister publication Fishermen’s News.